Greek industry holds firm despite turmoil

As locals and tourists face the closed sign on ATMs and civil unrest spills into the streets of Athens today, it’s probably timely for the Australian appliance industry to take a look at how its Hellanic colleagues have been faring in in the past few months.

According to the Euromonitor International ‘Consumer Appliances Report in Greece’ issued earlier this year, 2014 had improved for the country’s consumer appliances suppliers and retailers. Major appliances, which had been experiencing steep declines also began to show signs of recovery fuelled by Greek consumers who had postponed replacing their appliances during previous years, started to do so once again in 2014.

Nevertheless, the economic turmoil which has continued in the first half of 2015 culminating in today’s latest crises, has continued to take its toll on consumer appliances. A deep decline in disposable incomes meant that most Greek consumers have bought entry-level appliances rather than those with advanced features.

A major trend which flourished amidst the Greek recession has been a shift from replace to repair. Replacement cycles extended above the Western European average, as Greeks who were reluctant to replace their appliances for as long as possible, repaired them instead.

Positive growth recorded despite recession

The impact on the industry has been positive as those Greeks who opted for repair over replace in the last five years, 2014 and 2015 could no longer prolong the use of their old appliances. In 2014 this was reflected in the positive growth displayed by several categories.

The retail landscape in consumer appliances has been drastically affected by the length and intensity of the recession. With sales steadily contracting from 2009 onwards, and with strong competition coming from online sales, where consumers can find the same products but at lower prices, traditional retailers came under heavy pressure. Many independent appliances retailers were forced to close, whilst big chained retailers engaged in fierce competition for a piece of the shrinking market, and focused on their online shops.

Value sales are set to recover over the forecast period

With sales of major appliances picking up after several years of decline, Euromonitor reports that value sales are set to witness positive, albeit marginal growth over the forecast period at constant 2014 prices. Vacuum cleaners and home laundry appliances are expected to see amongst the best performances in value terms. The former are being driven by the performance of cylinder and upright vacuum cleaners and the introduction of energy labels for vacuum cleaners, whilst growth in home laundry appliances will derive primarily from the good performance of dryers in general, which will continue to grow from a low base.